coronavirus

Some Restaurant Owners Run Into New Challenges As Meat Costs Rise

NBCUniversal, Inc.

As businesses in Texas begin to reopen, some restaurant owners are running into new challenges as the coronavirus pandemic takes a toll on the meat industry and processing plants.

Emily Williams Knight, president of the Texas Restaurant Association, said some plants are down as much as 30-50% in production.

“What’s so challenging for our restaurants that have just gone through this - almost six weeks of not really being able to create the kind of revenue they’d like, now they’re having trouble getting product,” Williams Knight said.

She said this means in some cases, prices for meat are now significantly higher. However, she said the growing challenge on supply has more to do with processing.

“That’s from Nebraska to Iowa to Arkansas to Texas where these communities of these workers who are amazingly working through this crisis – when someone gets COVID, it tends to pass very quickly so they have to take those plants down or reduce those operations,” she said.

Prior to the COVID-19 pandemic, Williams Knight said there were 50,000 restaurants across Texas. The industry employed about 1.4 million people. About 10% of those restaurants have been lost for good, according to Williams Knight.

Tim Love owns 14 restaurants, with 12 in Texas. All of them are now open and operating under the current capacity restrictions and new safety guidelines.

“We’re very excited we’ve opened every one of our restaurants up,” Love told NBC 5 on Wednesday.

Though given the increase in pricing for meat, he says business is “as good as it can be”.

“The meat price is up right now about 8 to 9% and when you do the math on that, most restaurants make anywhere from 8 to 12 percent margin,” he said. “Beef is a big product of what we sell. It eats up a lot of the margin of what we’re doing.”

Love said he does not plan to adjust pricing at his restaurants to make up for this, but he does encourage people to support local if they can.

“Go out, see my friends, come see us. Come see us, come see everyone in this business. We all need it,” he said.

Williams Knight said as the supply chain challenge continues to add burden on restaurants reopening their dining rooms and limit the products they can purchase, the association recommends the use of limited menus and planning ahead.

They also recommend the implementation of dynamic pricing. For example, some restaurants could choose to charge a lower-than-usual price for selected items in a promotion or during happy hour and charge a higher-than-usual price for selected items in a special occasion or a holiday.

Contact Us